KBR Boosts Backlog With New EPCm Contract by Woodside Energy
KBR, Inc. KBR is selected for an engineering, procurement and construction management (EPCm) contract by Woodside Energy, as operator for and on behalf of the Pluto Joint Venture.
Per the contract, it will undertake modifications for the Train 1 of Woodside's Pluto LNG (Liquefied Natural Gas) facility, which is located near Karratha, Western Australia. The modifications will facilitate the processing of Scarborough gas of up to three million tonnes annually, through Train 1.
KBR’s optimism is boosted after the contract win as it believes its experience and knowledge scope in designing, developing and supporting cryogenic LNG facilities positions its best to support the project.
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Shares of this engineering, construction and services firm have inched up 0.8% on Sep 25, during the trading session. Furthermore, the stock has gained 12.9% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s 11.9% growth.
Contract Wins Boost KBR’s Growth
KBR’s focus on a resilient business model and efficiency-boosting initiatives has sparked its project-winning momentum. The company’s consistent award wins portray its future prospects regarding its technology and service delivery. In the second quarter of 2023, it received $2.2 billion in bookings and options in highly strategic areas, thus taking its backlog and option level to $21.1 billion. This uptrend was driven by increased activity to support exercises, training and other related activities in the European Command, along with on-contract growth in Science & Space. Also, the growing demand for Sustainable Technology Solutions, primarily from engineering and professional services and technology licensing, added to the growth.
Since second-quarter 2023, the company announced eight contract wins. Recently, on Sep 18, it secured a license and engineering design contract from Hanwha Impact Corporation, where it will provide technology licensing and proprietary engineering design for the unit to produce more than 200 metric tons of clean hydrogen daily for use as fuel. On Sep 14, the company’s commercial cloud and mission service platform, KBR Vaault, was selected for the Federal Risk and Authorization Management Program.
The increasing global importance of national security, energy security, energy transition and climate change has been acting as a major tailwind for KBR. Going forward, KBR expects broad-based growth across both Government Solutions and Sustainable Technology Solutions segments. Primary growth drivers include high-end and differentiated government business work, strong margin performance and technology and consulting business.
Zacks Rank
KBR currently carries a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks from the Construction sector are EMCOR Group, Inc. EME, TopBuild Corp. BLD and Fluor Corporation FLR.
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TopBuild currently sports a Zacks Rank of 1. BLD delivered a trailing four-quarter earnings surprise of 14.1%, on average. Shares of the company have risen 59.1% in the past year.
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Fluor currently sports a Zacks Rank of 1. FLR delivered a trailing four-quarter negative earnings surprise of 5.3%, on average. Shares of the company have gained 52.9% in the past year.
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